Asia’s growing gas dependence needs $ 70 bn investment

Nearly $ 70 bn in investments are required by 2020 to meet Asia’s growing dependence on natural gas for its electricity needs, energy experts said.
Oil will remain a marginal player in the power generation sector because of its high price while coal will remain the most popular fuel in the region thanks to its abundance in China and India, they told the Asia Power conference.

Pudjo Suwarno, vice president for gas marketing at Indonesia’s PT Exspan Nusantara, said electricity demand in Asia should grow at an annual rate of 3.4 % between 2000 and 2020, with China leading the pack at 4.7 %. Power plants fuelled by natural gas are expected to supply 15 % of Asia’s total electricity demand by 2020, up from 12.3 % in 2000, Suwarno said.
Between 2000 and 2020, he said investments totalling $ 25 bn were needed for new infrastructure such as pipelines and LNG terminals to meet rising demand. An additional $ 42 bn is needed to build combined cycle gas turbine power plants with a capacity of 85 GigaWatt to meet demand for the same period. The investments exclude funding for the construction of new LNG tankers to transport the product across the region.

Suwarno said oil would become an increasingly unpopular fuel in Asia because of its high price, reflecting a global trend. Data presented at the conference showed oil’s share for power generation fell from 22 % globally in 1971 to 9 % in 2000 and is projected to further decrease to 6 % by 2020. From 1971 to 2000, the share of natural gas in the market globally rose from 17 % to 20 % and is forecast to increase to 29 % by 2020.
Coal remains the largest source of energy for power plants, but its share of 43 % is expected to decline to 40 % in 2020. Nuclear power’s share should fall from 19 % in 2000 to 13 %.

Leonidas Drollas, deputy director and chief economist of the Britain-based Centre for Global Energy Studies, said that, at current prices, it was virtually impossible for oil to regain its lustre as a favoured fuel for power plants.
There are still 495 GW of oil-fired power plants worldwide, 55 % of which are in the industrialised nations and 38 % in developing countries, he said.